Netflix News: Warner Bros. Stretches DVD Delay Another 28 Days, HBO Tells Them to Buy Retail Discs

Netflix News: Warner Bros. Stretches DVD Delay Another 28 Days, HBO Tells Them to Buy Retail Discs

Jan 06, 2012

As if there were any remaining doubt that distributors see Netflix as a growing threat to their retail business model, everyone's favorite DVDs-by-mail and streaming service just hit two more roadblocks on its quest to stuff mailboxes and Internet tubes with as many movies as possible.

First, the least ominous of the two: HBO has decided to discontinue its discount relationship with the company. That doesn't mean Netflix will suddenly stop carrying HBO content, it just means they're no longer allowed to buy the discs from HBO on the cheap. Basically, part of Netflix' business model is that it buys huge volumes of discs directly from the manufacturer (it's not like they go out to Best Buy every Tuesday, buy a bunch of movies and just throw away the cases) instead of a retailer. Now HBO has essentially told them that if they want to give their customer's the next season of, say, True Blood, they'll have to go go buy a bunch of copies at retail and toss the cases.

The reason behind the move is a simple one: HBO doesn't need Netflix. It's one of the few content creators in the market that proves season after season that its premium content is indeed worth the premium they charge. They have their own Netflix-like streaming service in HBO Go, which is gaining more traction as more cable providers adopt the feature, so there's little incentive for HBO to dillute the air of exclusivity they've been cultivating for decades by cutting a direct competitor like Netflix a break.

The second slap Netflix received this week, however, is a bigger deal. If you'll recall, last year saw a wave of studios putting an end to the day-and-date availability of their new DVDs and Blu-rays on Netflix' service. Several of the biggest studios around only agreed to give their highly coveted new releases to rental companies 28 days after they're first available on DVD. Now, after several months of contemplation, Warner Bros. has decided to double down on that window by another 28 days. 

Of course, this new 56-day window isn't exclusive to Netflix. Warner Bros. are applying it to all rental providers, which means you're going to have to wait two months after The Dark Knight Rises hits DVD to find it in a Redbox or on the shelves of a Blockbuster (if you can even find a Blockbuster these days). And while one studio barring rentals for two months may not seem like a big deal, it'll become one if Paramount, Fox and the rest of the Hollywood giants decide to join in the scheme, which is meant to limit supply and thus force eager audiences to buy more movies instead of renting them. Or, you know, just download them illegally.

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